Sahara supports SEBI's claim to bring $13 million to refund account

New Delhi/New York: Engaged in a long-drawn legal battle with SEBI, Sahara has supported the regulator's claim before a US court to bring back nearly USD 13 million from sale proceeds of a business jet of the crisis-hit group. The group also lauded " SEBI's active cooperation" in the matter, which relates to a court-ordered sale of a corporate jet owned by a Sahara group firm after a litigation there and a receiver was appointed to look into distribution of the fund kept in an escrow account.

While the Securities and Exchange Board of India (SEBI) had approached the Indianapolis court last month with a claim that funds need to be transferred to SEBI-Sahara Refund Account, to comply with a Supreme Court of India order, the demand was rejected by the US court because it was made beyond the stipulated timeframe and was not in accordance with its orders. However, the court had asked the receiver to verify the validity of the claim and take a decision accordingly.

Reacting to the development, a Sahara group spokesperson said on April 13 in a statement that Hospitality Business Limited, a Sahara Group company, had acquired a new Airbus A319 aircraft. "The aircraft was to be given to a UK-based operator on a long-lease contract for operations as a luxury executive jet for private charters. The aircraft was sent by Hospitality to Indianapolis-based Comlux for high-end interior design and cabin completion.

"Hospitality was unable to pay the contracted fees to Comlux as a result of the Sahara group's inability to undertake further foreign exchange transactions. Comlux therefore filed a suit against Hospitality in the Indianapolis court for damages under a lien and for liquidated damages under the cabin completion agreement, which was decreed." On the claims made before the court for funds from the escrow account, Sahara said, "The receiver invited any third party claims as ordered by the Indianapolis court.

"Apart from a claim received from the UK-based charter operator following the sale of the aircraft, SEBI also emailed the receiver staking claim to the money left over after the decreed amount had been paid to Comlux. "There were concerns raised by the court and the receiver that the claim/objection emailed by SEBI was not in proper form, it was not filed through the obligatory Mutual Legal Assistance Treaty protocols, and it was unsubstantiated."

The spokesperson further said that Sahara and Hospitality Business Ltd, however, made specific submissions in court that all residual monies must be remitted to the SEBI -administered account where Sahara had been accumulating money for compliance of the Supreme Court of India's orders.